FCPS rescinds rollover request to aid cashflow

Published 2:35 pm Friday, January 7, 2022

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Franklin City Public School has rescinded its request for $577,200 to be rolled over to its fiscal year 2022 budget. This was done to help the school system avoid the cashflow issue it faced in October 2021 when it briefly had a negative allocated cash balance.

Jeff Ryder

The issue affected not only the school division but also the city of Franklin. 

Explaining the link between the city and the school system’s finances, Jeff Ryder, FCPS assistant superintendent of finance, nutrition, operations and special programs, said, “We’re part of the city’s checking account, but part of their checking account is allocated to us for our operations.”

During a Nov. 4 presentation to the school board, Ryder explained the cashflow issue that arose, noting that it had really been building through August and September.

“There were a couple missteps, and the essence of the problem was that too many federal dollars that are reimbursable went out in too short of a time period, and that served to deplete the school division’s allocated cash balance,” he said.

Up to September, FCPS had not needed to project cashflow, he stated in his presentation, because the monthly cycle of cash receipts had always outpaced the level of cash expenditures and because the cash balance allocated to the school division was always adequate to cover the funding gap that exists between grant money expenditure and grant money reimbursement.

After the cashflow issue arose, joint efforts took place between the school system and the city to ensure the issue does not happen again.

Tamara Sterling

FCPS Superintendent Dr. Tamara Sterling stated in a memo to city officials that during a Dec. 9 joint session that was held between the City Council and school board, the school division advised the council that the division would like to rescind its request for $577,200 to be allocated in FY 22 for bathroom renovations at S.P. Morton Elementary School.

Speaking to the school board during its Dec. 16 meeting, Sterling said that from the Dec. 9 joint meeting, “the city manager asked us to send her a letter, and we did.”

The letter, which was the aforementioned memo, provided clarification of the recension of rollover request.

“The school division is requesting the $577,200 to stay in our unexpended fund balance to cover the ‘float’ on federal funding that must be paid in advance before reimbursement,” Sterling wrote. “We are committed to ensuring that the necessary funds needed for any purchases are available and won’t deplete the city’s fund balance.”

The memo also included a future request.

“The school division is requesting that any surpluses for FY 2022, 2023 and 2024 remain in the school division and not revert to the city so that the school division can cover the ‘float’ on ESSER III grant expenditures.”

ESSER stands for Elementary and Secondary School Emergency Relief.

To the school board Dec. 16, Sterling concluded her report on the letter by saying, “We don’t want a repeat of last October, so we are requesting to keep those funds in the division.”